Taking Ownership
This past Wednesday, March 22nd I flew out of San Francisco International airport at 2:45pm for the last time as a resident of the Bay Area.
After 14 years working with startups in Silicon Valley I had finally packed my bags, bid farewell to this famous corner of the planet to repatriate back home where I shall be running a venture capital fund. After many years of searching and seeking my life purpose had finally come into focus some months back, which is to immerse myself in the animating struggle of changing the African narrative by helping to uncover and support amazing local entrepreneurs build great companies.
This message can be viewed as a sequel to a recent blog I wrote decrying the big, painful chasm and massive lost opportunity currently playing out in the African startup ecosystem. This sequencing was not planned. It is simply a consequence of the velocity by which meaningful experiences continue to manifest, compelling me to extemporaneously share as I move forward on this exhilarating journey. I can’t remember ever feeling more alive and in flow.
I arrived in Nairobi two nights ago, Thursday the 23rd @ 9:30pm, exhausted! 23 hours total travel time, preceded by 48 hours of tepid sleep, with an apartment move thrown in will definitely do that. Dog tired yet buzzing with excitement!
Happily, the following evening my partner and I had dinner plans scheduled with one of those aforementioned amazing local entrepreneurs. If your initial thought regarding the purpose of this meeting was the entrepreneur pitching us for funds I can’t be mad at you. That’s how it works. Entrepreneurs pitch VCs. Not this time. It was way more exciting than that!
We were meeting with one of the first few local entrepreneur success stories who had expressed an interest for investing in our fund.
We sat down to a dinner punctuated with amazing moments of synergy and shared thinking across numerous dimensions. What resonated most for me was the authenticity and grit that characterized this particular entrepreneur’s and his co-founders journey.
To cut a long story short they had been through the very same trials and tribulations all genuine entrepreneurs go through; fear, doubt, grind, investor rejections (both foreign and domestic), product pivot, team building, developing an amazing company culture, BOOTSTRAPPING to break-even and sustainability, until finally, after a looooong and arduous journey arriving at the sweet waters of success, profitability, scale, vindication.
They had done it right. They had even done the magical thing of apportioning a sizable equity stake for their employees who stuck with them through thick and thin, taking lower than market rate salaries to stay at the company even when success was not guaranteed, a company they had all grown to love.
The ‘Cleaning Lady’
The one particular narrative that even now fills me with with tears is the ‘cleaning lady’ story. Quite early on in the company’s history our intrepid entrepreneur had ran into her sitting on the pavement next to where he normally parked his car at their then not so glamorous offices. Through a gesture of human kindness which you will routinely encounter in Africa, he offered her a means of earning some money by washing his car. He sensed a need and in true entrepreneur fashion responded by creating an opportunity.
She jumped at the chance and proceeded to do a stunningly amazing job. Through the cars sparkling cleanliness the pure expression of her desire for personal excellence and hunger for opportunity shone through. He was so moved that he immediately offered to expand the scope of their engagement to include cleaning the office.
Once again she delivered excellently and he simply had no choice but to keep her around on a full time basis. Bear in mind that prior to this there had been no job description for an office cleaner or any apparent need for one let alone a budget. He simply saw a need, responded to it, witnessed excellence and doubled down on brilliance. Keep in mind her income at the time was no more than $80 a month.
She stayed on with the company growing to become part of the fabric of that team in her honorable role as ‘cleaning lady’, which, as roles tend to do in startups continued to expand in scope. As part of the early team she received a small equity stake via the employee option pool.
The company continued to grow steadily finally attracting an institutional investor with whom they worked to engineer a round of funding making it possible for early investors and employees to exercise their liquidation options and turn their equity into cash. The ‘cleaning lady’s’ stake had by then matured to a healthy $300,000! More money than she would ever have hoped to otherwise make in an entire lifetime, all in under 7 years flat! I am sure you will agree she is worth every penny.
Reveal #1: One early enabler who contributed a relatively small amount of money to the company realized a 75X return on that one investment.
Insight: The digital transformation of Africa is well and truly underway and the entrepreneurs who will develop the most meaningful and impactful solutions will come from the continent.
The one question that hangs yet unanswered is will African holders of capital be part of this transformative wealth creation engine? As things stand today it appears that there is a significant chance that many will miss the boat. As you read this there is now a veritable firehose of international capital washing up on the African startup scene. Local capital needs to recognize the moment or risk missing out on what is a significant and unprecedented opportunity to do well while at the same time fulfilling the higher purpose of participating in changing the African narrative.
At Impact Africa Fund we have developed a strong venture capital program designed for the local context and built around a talented, committed team. A key part of our mandate is to demystify venture capital for local investors by providing a path for them to access one of the most exciting business opportunities of our time, the digital transformation of African.
We seek to partner with like minded High Net Worth Individuals, investment institutions, pension funds etc. We also very much welcome partnership with international investors who share our ethos and can boost our capabilities. We believe in the idea of a global village and seek to build relationships wherever they manifest.
At IAF our plan is to aid in the development of highly valuable African companies and to ensure a significant portion of the wealth created in this process stays on continent to catalyze further growth.
Onwards and upwards!
